Rubber Bill: Growers demand inclusion of MSP, agricultural status in legislation

Rubber growers feel that the third draft of the Bill, after revisions in 2022 and July 2023, is skewed towards the manufacturing industry.

The demand for a minimum support price (MSP) has become a bone of contention in the discussion of the revised Rubber (Promotion and Development) Bill, 2023—growers want MSP to be included in the Bill along with the grant of agriculture status for rubber.

Rubber growers feel that the third draft of the Bill, after revisions in 2022 and July 2023, is skewed towards the manufacturing industry. The chief objectives of the Bill, which is likely to be introduced in Parliament before the elections, are to promote and develop the rubber industry and to constitute a Rubber Board in line with contemporary requirements.

The Rubber Board held discussions on the Bill with industry stakeholders in Kerala, Tamil Nadu and Karnataka last month. Rubber Board executive director M Vasanthagesan said the inclusion of MSP for rubber in the bill was the main demand that emerged from the meetings, which was largely attended by growers. Another strong suggestion was the provision of agriculture status for rubber, he added.

However, there was no suggestion on the rate of MSP to be fixed. MSP for rubber has become a political issue in Kerala, the largest rubber producing state in the country, with the Archbishop of the Syro Malabar Church of Thalassery, Mar Joseph Pamplani, declaring early last year that the BJP will get an MP from the state if the Centre gives an MSP of Rs 300 per kg for rubber.

According to the prelate, small rubber growers (many of whom belong to the Christian community) in Kerala were suffering due to the high cost of production and poor price of rubber and politicians were least concerned about this problem. Though the ripples created by the statement soon died down, it led to the strengthening of a plea for MSP for rubber among the growers. With Parliamentary elections a few months away, the issue is likely to be in the spotlight again.

The rubber price stabilisation fund incentive scheme of the Kerala government ensures a price of Rs 170 per kg to the small grower by subsidising the difference with the market price. It was raised from Rs 150 to Rs 170 per kg in 2021. This is considered to be the average of the cost of production of rubber in Kerala, though growers reckon it to be more than that now. The Swaminathan Committee on farming had recommended raising the MSP to at least 50 percent above the weighted average cost of production. By this principle, MSP should be around Rs 250 per kg, it is pointed out.

“The Bill is just to fool people,’’ said PC Cyriac, retired civil servant and a former chairman of Rubber Board. “Unlike cotton or jute, rubber is getting stepmotherly treatment from the Centre. It should ensure a fair price for rubber growers and protect them by raising the rubber import duty further. Higher imports in the last decade pushed down local prices paving the way for a drop in production,’’ Cyriac, who also heads the Rubber Farmers Protection Council, said.

The growers sought changes in various other provisions in the revised bill during the consultations.

“One of the objectives cited in the Bill is to encourage fair and remunerative prices for growers, especially small growers. We have requested they change the word ‘encourage’ to ‘ensure’. Another objective is to ‘seek to provide for the welfare and better working conditions of rubber plantation workers’. Here instead of ‘seek’ we want it to be changed to ‘ensure’,’’ said Babu Joseph, general secretary of the National Consortium of Regional Federations of Rubber Producers’ Societies India, who attended one of the meetings.

Agriculture status demand
Another demand from the growers is the grant of agricultural status for rubber. “Making rubber, which is an industrial product, an agricultural commodity may not be technically feasible. What we have requested is to provide agriculture status to growers, which will enable them to procure agricultural loans for rubber. At present many banks are not directly providing loans for rubber cultivation’’ said Joseph.
The exclusion of several forms of rubber also evoked protests from growers. As per the Bill rubber means crude rubber, latex (either in fluid or dry state) and sheet rubber, all forms of crepe rubber, and block rubber.
“We have requested them to include synthetic rubber, reclaimed rubber and compound rubber, which are widely used in the industry, in the definition of rubber,’’ said R Sanjith, secretary of The United Planters’ Association of Southern India (Upasi).

Joseph said that last year India consumed 6.5 lakh tonnes of synthetic rubber. “How can they say that it is not part of the rubber industry?” Lower import duty for compound rubber had led to largescale import of natural rubber under its guise. The Centre raised the import duty of compound rubber from 10 to 25 percent, on par with natural rubber, in the last budget.
The Bill calls for registration of all growers for sales or purchases, import or export of rubber. The validity of the certificate of registration will be a minimum of 15 years and not exceeding 25 years. “This is a welcome step. We have suggested making it a one-time registration as rules like European Union Deforestation Regulation (EUDR) will come into force soon,’’ said Sanjith.

The growers objected to the reduction of members representing Kerala from 8 to 6 in the proposed reconstituted Rubber Board, comprising 31 members in total. There are more representations to north eastern states considering the growing importance of rubber cultivation in this region. There will be two members each for Tripura and other northeastern states. Tamil Nadu and other non-traditional rubber producing regions will have two members each.

“We are not against giving representation to other states but are against lowering the number of members representing Kerala, which accounts for about 70 percent of the production,’’ said Joseph.